Consider the video from the front page of numer.ai. There, two statements are made
1) A hedge fund possesses a lot of expensive financial data [so numer.ai anonymizes this data before releasing it to the public by some elaborate encryption method]
2) The founder of the hedge fund associated with numer.ai invested a million dollars of his own money
What I don't understand exactly is the connection between these statements:
Although in the video this is not stated explicitly, it seems to be implied that the founder paid this million for financial data. Is this inference correct ?
Secondly, am I correct assuming that hedge funds buy their data from other companies, or do they somehow "generate" their own data ? Could you name any companies that one could buy high-quality financial data from ?
Thirdly -assuming my assumption from the previous bullets were correct - paying one million dollars for financial data seems ridiculous. Is it plausible that the founder indeed paid all that for financial data ? I've read that the costs of setting up hedge funds vary greatly, from 20k to 200k, but that still short, by a large margin, of one million. Why do you think numer.ai's founder had to invest this amount of money ?